On a scale where 1 represents ‘ineffective’ and 7 ‘effective’, the Botswana Stock Exchange has emerged as one of the best run in Africa with a score of 4.42.
In the latest Rand Merchant Bank Where to Invest in Africa report, BSE occupies position six after South Africa (6.37), Morocco (5.22), Kenya (4.61), Zambia (4.66) and Mauritius (4.52). In response to the question of what BSE is doing to close the gaps, its Deputy Chief Executive Officer, Thapelo Tsheole, begins by explaining that for a market to be run effectively, regulatory overburden has to be at once minimal and optimal, especially that excessive regulation can be both a deterrent and an expense to the regulated.
“The BSE has, in 2014, amended its equity listings requirements to make them more effective in respect of application and compliance by the market – the brokers as well as the issuers and investors. The amendments are expected to make the rules a lot more user-friendly with the expected end-result being that the issuers would find the BSE to be relatively competitive in terms of its regulatory environment,” says Tsheole, adding that at the present, the rules are awaiting approval from the Non-Banking Financial Institutions Regulatory Authority.
In like manner, BSE is reworking its debt listings requirements and members’ rules. Elaborating on the latter, Tsheole says that as the BSE embarks on transition through demutualization, it will become imperative to review the rules in order to govern the landscape accordingly.
“This is one aspect that will boost our effectiveness in respect of regulation. Our regulatory processes are very transparent and this will continue to be upheld. This is so because the BSE conducts extensive consultation with market participants ahead of submission of rules to NBFIRA for approval. In this regard, valid market sentiments are duly incorporated a process that also promotes accountability and ownership amongst the regulated and thus easing compliance. Compliance is an on-going activity and to ensure that the market is up-to-date with regulatory requirements, the BSE conducts compliance workshops every quarter. Such pursuit helps increase awareness amongst issuers and ultimately promotes general market confidence as issuers are constantly refreshed on best practice regarding compliance with BSE requirements,” Tsheole says.
In the RMB report, BSE got the same rating as China and scores well above India (4.30), South Korea (3.75), Russia (3.73) and Argentina (3.76).